Election 2015: The Economy

Published: 30th Apr 2015

We usually measure the performance of the UK economy by looking at Gross Domestic Product (GDP). This measures the value of all the final goods and services produced within the UK. In 2014, UK GDP was about £1.8 trillion in cash terms. That's about £28,000 per person in the UK.

The UK's GDP fell in 2008 because of the global recession, but has been increasing, with a few stutters, since then. GDP growth is a large part of what politicians mean by the "health of the economy". The UK has seen solid growth since the start of 2013.

Common claims

"The UK was the fastest growing economy in the G7 last year"

The latest figures from the International Monetary Fund show that Britain had a real GDP growth rate of 2.6% in 2014, just higher than Canada's 2.5%.

We're not the fastest growing advanced economy (for example, Ireland grew 4.8%), and we're not the fastest growing major economy (China grew 7.4%). But we are the fastest growing of the major advanced economies—the G7 nations.

"British workers are less productive"

British workers are about 20% less productive than those in France and Germany. The only country in the G7 group of countries with lower productivity than the UK is Japan.  But UK employees work more hours over the year and there is a high rate of employment, so it's important to put these figures in context. This is partly down to lower British investment in equipment per worker. Full article here

 "There are 760,000 more businesses than in 2010"

There were 760,000 more businesses in the UK in 2014 than there were in 2010. 707,000 of this increase is in businesses with no employees, which now account for 76% of private sector businesses.

"The gender pay gap is the lowest on record"

The pay gap is measured using data from the Annual Survey of Hours and Earnings (ASHE). This doesn't look at the difference in pay for men and women doing the same work.

Instead, it looks at the median hourly wage (excluding overtime) for men and women. This is affected by things like working patterns, qualifications and the type of jobs people do.

In 2014, the gap was about 9.4% for full-time employees, the lowest on record, and falling over the long run.

The 'pay gap' is not uniform across all age groups: it actually becomes "negative" for people in the age ranges between 22 and 39. In other words, for full-time employees, the median woman actually earns more per hour than the median man does in these age groups.

It's also not constant across different types of job: the median wage for women working part-time is 5.5% higher than the equivalent figure for men. This has widened over the long term.

 

Read more on the economy:


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